ERSP Recommends Universal Commerce Modify Advertising for ‘Senior Mobile’ Cell Phone to Better Disclose Activation Fee

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Universal Commerce modify certain advertising claims for Senior Mobile, a cell phone designed for seniors, to better disclose that the free phone carries a $97 activation fee.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to the attention of ERSP pursuant to its ongoing monitoring program.

ERSP reviewed print advertising claims for Senior Mobile, including:

• “Public set to get easy to use cell phones free"
• “New cell phones aimed at keeping Texas residents safe are being given away free to everyone who beats the 48 hour deadline to cover just the one-time activation fee, but only those Texas area residents who call are also getting nationwide coverage with no long distance charges, no contracts, no deposits and no monthly bills”
• “The only thing residents need to do is call the Toll Free Hotline before the 48-hour order deadline ends to cover just a one-time activation fee to instantly be awarded the new Senior Mobile cell phone for free.”
• “U.S. Gov’t urges citizens to carry cell phones”

Senior Mobile is a cell phone designed for seniors that includes an “E” button, a preprogrammed button which allows consumers to make a one-touch call to an emergency dispatch center, instead of dialing 9-1-1. 

ERSP determined that the marketer provided a reasonable basis for its position that the advertising has been appropriately identified as a paid advertisement. 

The “free” offer for Senior Mobile is reinforced several times in the advertisement. While ERSP did not dispute that the cell phone itself is free, it found that the $97 activation fee was a material condition of the offer. As such, ERSP recommended Universal Commerce clearly and conspicuously disclose material information about the activation and shipping costs in the context of the advertising at issue as it pertains to the “free” offer. 

The company, in its marketer’s statement, said, “Universal Commerce, LLC, which is committed to ensuring that its advertising is truthful, accurate, and substantiated, appreciates the opportunity to participate in the Electronic Retailing Self-Regulation Program self-regulatory process … While we disagree with ERSP's conclusion that the multiple disclosures in the advertisement that consumers must pay a $97 activation fee to obtain the phone are not sufficiently clear and conspicuous, Universal Commerce will take ERSP's suggestions into consideration in its future advertisements.”

ERSP Reviews Advertising for ConsumerAffairs.com, Recommends Marketer Modify Certain Claims

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that ConsumerAffairs.com modify certain claims for its website.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising was challenged by UnbeatableSale, Inc.

ERSP reviewed online advertising claims for ConsumerAffairs, including:

• “Consumer Affairs is a consumer news and advocacy organization founded in 1998 by James R. Hood, a veteran Washington, D.C. journalist and public affairs executive. Our website includes consumer news, recall information and tens of thousands of pages of consumer reviews.”
• “ConsumerAffairs.com is a private, non-governmental entity that empowers consumers by providing a forum for their reviews.”

The challenger also expressed concerns regarding the filtering of reviews on the website; a lack of disclosure to consumers that describes how the ratings system operates; the message that ConsumerAffairs.com is a consumer advocacy organization; and the lack of disclosures describing the material connection between ConsumerAffairs clients and their review pages.

ConsumerAffairs is a website that publishes stories on various topics and compiles consumer news, recall information, consumer resolutions, and company features along with press releases and alerts from different public sources. The site also maintains a publicly searchable database of consumer reviews of companies; each page pertaining to a company on the website includes a five-star “satisfaction rating” based upon complaints and reviews.

As the marketer’s website encompasses all aspects of customer contact, including products, services, sales and complaints, ERSP did not object to the marketer’s characterization of its website as a “… consumer news and advocacy organization.”

ERSP found that the relationship between ConsumerAffairs and its accredited members was not adequately disclosed and thus, recommended the marketer clearly and conspicuously disclose the material connection it has with its accredited members throughout its website.

ERSP also recommended that ConsumerAffairs modify its website to clearly and  conspicuously disclose to visitors of the website that reviews and complaints upon which the satisfaction ratings are based are displayed differently for accredited members and non-accredited members.

The company, in its marketer’s statement, said, “… as part of its continuing effort to provide consumers with the most accurate and updated information, ConsumerAffairs has made a number of modifications to its website that it believes addresses the two recommendations made by ERSP in its decision. ConsumerAffairs appreciates the recommendations received from ERSP regarding the information presented on ConsumerAffairs’ website, and believes that the modifications it has made address ERSP’s concerns and comply with all FTC guidelines.”

ERSP Refers Advertising for Mobile Money Code to FTC

The Electronic Retailing Self-Regulation Program (ERSP) will refer direct response advertising for Mobile Money Code to the Federal Trade Commission (FTC) after the marketer failed to respond to an ERSP inquiry.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to ERSP’s attention pursuant to its ongoing monitoring program.

Claims at issue in the initial inquiry included:

• “Free Training: 100% Make Money With Your Cellphone!”
• “I’m going to help make you a millionaire”
• “The $45,422 Dollar a Day System – Mobile Money Code”
• [screen shot of statement: Available Balance] $2,577,839.10”
• “In the past two years I’ve made my money using a very powerful and unique custom made, cash-generating cell phone technology.”
• "I’m really hoping that this ‘automatic money system’ works…Am I really done? I can’t believe I’m done… $448.10! Wow! I was a believer, but now…wow! I mean, this is incredible!”

Pursuant to the ERSP Policy and Procedures, after failing to provide a substantive response to ERSP’s original inquiry within fifteen calendar days, the marketer was afforded a second ten-day period in which to submit a substantive response. The marketer did not do so. Pursuant to ERSP Policies and Procedures, this matter has been referred to the FTC.